Quick problems! Will give good rating. A: Swifty Corporation plans to sell 3000

Question

Quick problems! Will give good rating.

A: Swifty Corporation plans to sell 3000 purple lawn chairs during May, 7700 in June, and 3000 during July. The company keeps 15% of the next month’s sales as ending inventory. How many units should Swifty produce during June?

6995

b: Bonita has a standard of 2 hours of labor per unit, at $12 per hour. In producing 2600 units, Bonita used 4900 hours of labor at a total cost of $59780. Bonita's total labor variance is

$2620 F.

C: Pina Colada, Inc. is considering purchasing equipment costing $42000 with a 6-year useful life. The equipment will provide annual cost savings of $12000 and will be depreciated straight-line over its useful life with no salvage value. Pina Colada requires a 10% rate of return.

What is the approximate net present value of this investment?

$8771

c: A $105000, 10%, 5-year note payable that pays interest quarterly would be discounted back to its present value by using tables that would indicate which one of the following period-interest combinations?

5 interest periods, 2.50% interest

Explanation / Answer

A Units to be produced during June = 7700+(3000*15%)-(7700*15%)= 6995 B Total labor variance = 59780-(2600*2*12)= $2620 F C Net present value of this investment = (12000*4.355)-42000= $10260 D 20 interest periods, 2.50% interest

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